Second Quarter 2011

Issue Twenty-three

2 Q 2011 Recap

RE: Philadelphia Suburban Office Market - Second Quarter 2011

The Philadelphia region has fared well in the second quarter with continued growth and funding in the life sciences, medical and education sectors. A slow return to hiring in other industries is driving the rebuilding process. The commercial real estate environment is still aggressively in favor of the tenant—most submarkets were still over 20% vacant at the close of the quarter (Conshohocken, Radnor, Yardley and requirements over 100,000 square feet are the exception).  

Many of our growth clients have enjoyed various forms of state incentives. Below is a brief overview of the newly passed Department of Community and Economic Development (DCED) budget:

Form of Incentives

Types of Incentives

With the signing of Pennsylvania’s 2011/2012 budget came cuts as well as a streamlining of line items. For example the incumbent Customized Job Training, Opportunity Grant Program and Infrastructure Development were folded under the heading, Pennsylvania First. Pennsylvania First combines both by right and discretionary incentives under one budgeted amount of $25 million. Other trends to note were the slight increase for Marketing to attract Business and the $10 million allocation to a new program Discovered in PA, Developed in PA. Discovered in PA, Developed in PA will help small, medium-sized and high-growth businesses identify and access appropriate services and financing to help them be more competitive and grow their operations in the commonwealth.

Our team would like to thank the following clients for their support in the second quarter of 2011:

Please contact us to receive a report published by Torto Wheaton Research as well as CBRE's MarketView for the Second Quarter of 2011. They will keep you updated as to how vacancy, rental rates, and employment trends are effecting the Philadelphia Region's office market.

• Torto Wheaton Market Index Brief • Second Quarter 2011 Market Index Brief

The office market continues to be in the flux and depending on the submarket in question, offers either the tenant or the landlord leverage in negotiations.  If you anticipate needing more space, have been contemplating a lease restructure, or simply want an overview of current market conditions, we should be talking now.